With half-billion spent, mining company puts Alaska's Pebble mine project up for sale

ANCHORAGE — A mining company with a 50 percent interest in a huge copper and gold deposit in Alaska where hundreds of millions of dollars have been spent on exploration is trying to find a buyer for the contentious project near the world’s best remaining wild sockeye salmon streams.

Northern Dynasty Minerals Ltd. CEO Ron Thiessen said the Vancouver-based company is considered a junior mining company. What the Pebble Mine project needs is a mega-mining company to step in and help move the project forward, he said.

“We are interested in what is best for the project,” Thiessen told The Associated Press.

Opponents, including many commercial fishermen and lodge owners, say they want what is best for Bristol Bay and its world-class salmon-producing streams. To them, that means stopping the project before it is permitted and goes into production. The project is being prepared for permitting in 2012 with production slated to begin in 2015.

Northern Dynasty circulated the information in February and March that it was interested in a buyer for Pebble. So far, it has received no offers.

Thiessen said Northern Dynasty hopes to avoid a hostile bid, describing the asset as one that major mining companies would “covet.”

“The worst thing that could happen to us is a surprise bid where we are left with a 21-day period to take us over,” Thiessen said. “We are trying to get ahead of the curve.”

Northern Dynasty acquired Pebble in 2001. The prospect is located on state land designated for mining in southwest Alaska just 14 miles from Lake Iliamna and near numerous rivers that are salmon incubators for Bristol Bay. Between 2001 and 2007, the company invested about $180 million in Pebble.

In 2006, Northern Dynasty brought mining giant Rio Tinto in as a shareholder to lend credibility to the project.

In 2007, it entered into a 50-50 partnership with the much-larger Anglo American plc. Anglo American, a United Kingdom-based company with operations worldwide, pledged $1.4 billion to the project to take it through permitting and into production. Since the partnership was formed, Anglo has budgeted more than $410 million in Pebble.

Northern Dynasty describes Pebble as the largest undeveloped deposit of its type in the world. One assessment says it has the potential to produce 53 billion pounds of copper, 50 million ounces of gold and 2.8 billion pounds of molybdenum over nearly 80 years, while developing just over half the known mineral resource at Pebble.

But opponents of the project, some of them Alaska Natives who fear the mine will ruin a thriving commercial wild salmon fishery and put an end to centuries of living off the land, hope the valuable minerals stay in the ground and the mining companies pack up and leave.

“If they find a buyer, promises that were made are not going to be there anymore,” said Bobbie Andrew, a Pebble opponent and board member of Nunamta Aulukestai, a group opposed to the mine. “They promised that they would not do any damage to the environment and that the fish can coexist with the mine and I don’t believe that.”

According to the Alaska Department of Fish and Game, more than 22 million sockeye salmon — worth between $135 million and $140 million, according to preliminary figures — were commercially harvested in 2011.

With more than 1,000 bore holes drilled, Thiessen said Northern Dynasty’s job of discovery, exploration and engineering is complete at Pebble.

If a buyer is found, Northern Dynasty’s ties to Pebble will be severed. However, Thiessen said the agreements Northern Dynasty made with Anglo will remain in place, including the project standards set by Northern Dynasty.

That is small comfort to Pebble opponent Brian Kraft, who owns two fishing lodges near Bristol Bay.

“It is the wrong project in the wrong place,” he said.

The project, however, could be an economic boon for the region, said Lisa Reimers, CEO of Iliamna Development Corp., who grew up in Iliamna and now lives in Anchorage. She said the partnership provided employment for 150 people in the area last year with jobs ranging from housekeepers to shuttle drivers.

Commercial fishing isn’t the answer for many locals because they can’t afford to start businesses, Reimers said. Just look at the fishing permits, she said, 85 percent are owned by people from outside Alaska.

“Everybody wants to say it is either fishing or mining, but you need to look into whether they can coexist,” Reimers said. “We are going to take the opportunities that are there and right now Pebble is an opportunity for us.”